2018-TIOL-NEWS-214 Part 2, Dated: Tuesday, September 11, 2018

2018-TIOL-NEWS-214 Part 2 | Tuesday September 11, 2018

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	GST - Mend and Amend: Technical Session - Automation & Compliance

CASE STORIES

No relief for Sonia & Rahul Gandhi - HC rules exemption to Directors from disclosure of interests in non-for-profit companies under Companies Act does not automatically mean absence of legal obligation under Income Tax to do so

I-T - No addition for undisclosed investment in relevant year is to be made if investment of funds takes place in earlier years : ITAT

CX - A loss on product that is cleared finally using impugned goods as an input is not relevant for determining notional profit envisaged in rule 6(b)(ii) of CE Valuation Rules, 1975: CESTAT

DIRECT TAX


	2018-TIOL-358-SC-IT CIT Vs Intel Technology India Pvt Ltd Having heard the parties, the Apex Court condoned the delay and dismissed the SLP - Revenue's SLP dismissed: SUPREME COURT OF INDIA 2018-TIOL-359-SC-IT CIT Vs Babbar Charitable Trust Having heard the parties, the Apex Court condoned the delay and dismissed the SLP - Revenue's SLP dismissed: SUPREME COURT OF INDIA 2018-TIOL-1888-HC-KAR-IT CIT Vs Intel Technology India Pvt Ltd Whether while calculating deduction admissible u/s 10A, if certain expenses are excluded from the export turnover, the same will also be excluded from total turnover - YES: HC - Revenue's appeal dismissed: KARNATAKA HIGH COURT 2018-TIOL-1502-ITAT-DEL Elephant India Finance Pvt Ltd Vs DCIT Whether disallowance of expenses u/s 14A of Act can exceed the value of exempt income earned - NO: ITAT - Assessee's appeal allowed: DELHI ITAT 2018-TIOL-1501-ITAT-DEL DCIT Vs GE Capital Services India Pvt Ltd Whether the benefit of full deduction in the year in which an amount is actually paid or incurred can be denied merely on the ground that different treatment was given in the books of accounts - NO: ITAT Whether before applying the formula as per Rule 8D, the AO should record his satisfaction after examining the nature of expenses debited and examining the accounts of the assessee - YES: ITAT - Revenue's appeal dismissed: DELHI ITAT 2018-TIOL-1500-ITAT-MUM K S Softnet Solutions NCC Vs ACIT Whether when assessee fails to prove the payment of sub-contract charges through proper bills and other documents then considering the secondary evidences provided, disallowance to 10% of the charges is sufficient - YES: ITAT - Assessee's appeal partly allowed: MUMBAI ITAT 2018-TIOL-1499-ITAT-AHM DCIT Vs Gulmohar Green Golf And Country Club Ltd Whether entrance fee collected from members which is refundable after 25 years, is in nature of loan and cannot be considered income of club - YES: ITAT - Revenue's appeal dismissed: MUMBAI ITAT 2018-TIOL-1498-ITAT-HYD Suryajyoti Infotech Ltd Vs ITO Whether when the assessee has proved that the an amount in respect with secured loan was covered by sundry debtors then, the same cannot be restored back for fresh adjudication - YES: ITAT Whether while making disallowance u/s 40(a)(ia) if it is found that the assessee has failed to prove that the income of the recipient is not taxable in India then, the same calls for de novo adjudication - YES: ITAT - Assessee's appeal partly allowed: HYDERABAD ITAT 2018-TIOL-1497-ITAT-DEL LG Electronics India Pvt Ltd Vs ACIT Whether if speedy hearing is granted along with the stay to the assessee, stay would get vacated if the assessee seeks adjournment - YES: ITAT - Assessee's stay application allowed: DELHI ITAT

INDIRECT TAX

SERVICE TAX

2018-TIOL-2784-CESTAT-MUM

Pudhari Publication Pvt Ltd Vs CCE

ST - ROM application filed by appellant in the matter of order dt. 27.09.2017 - 2017-TIOL-4033-CESTAT-MUM and submitting that the Bench had set aside the penalty of Rs.19 lakhs out of the total penalty of Rs.27,13,790/- imposed u/s 78 of the FA, 1994 and, therefore, the penalty should stand reduced to Rs.8,13,790/- and, subsequently the order needs to be rectified to this extent - AR fairly agrees.

Held: Bench agrees that there is an apparent typographical error in the order - Accordingly, in the order, for the words and figures "25% penalty of Rs.18.13,790/- stands corrected to read '25% of Rs.8,13,790/-' - ROM application allowed: CESTAT [para 4]

- Application allowed: MUMBAI CESTAT

CENTRAL EXCISE

2018-TIOL-2783-CESTAT-BANG

Glastronix Vs CC

CX - The assessee is a registered service provider as well as engaged in manufacture of transformers, static converters, custom built electronic products and others - It availed Cenvat credit, however, on audit it was noticed that assessee cleared parts of high tension generator for X-ray - While clearing the subject goods it availed exemption under Notification No.6/2002-CE - From the books of accounts it was noticed that assessee availed credit on input services used in the manufacture of exempted goods which was in violation of CCR - Duty demand was raised - The Adjudicating Authority confirmed the demand on grounds that as assessee opted not to maintain separate books of account in terms of Rule 6(3)(b) CCR it was liable to pay along with interest.

Held: The assessee availed credit in respect of input services received in the factory and did not maintain separate accounts both for "dutiable and exempted final product - With regard to the input services, the provision of Rule 6(3)(b) will not be applicable as held in the order under challenge but the provisions of Rule 6(3)(c) are applicable - This Rule states that the provider of output service shall utilize credit only to the extent of an amount not exceeding 20% of the amount of service tax payable on taxable output service - The assessee has complied with this requirement which is clear from the ST3 return - Therefore the question of payment of an amount equal to the 10% of the price does not arise - Hence, the order-in- appeal is set aside: CESTAT (para 1, 4)

- Assessee's appeal allowed: BANGALORE CESTAT

2018-TIOL-2782-CESTAT-AHM

Grace Casting Ltd Vs CCE & ST

CX - The assessee is engaged in manufacturing MS Channels, Flats, Square Bar, Ingots, Round bar, Cold bar & CJ Casting - It availed Cenvat credit on inputs used, such as MS Scrap, MS Ingots, MS Billets, Ferro items like Aluminum, Manganese, SS Scrap, Silicon, Titanium, Chrome & pig iron - Based on intelligence inputs, the Revenue alleged that the assessee availed credit based on invoices issued by suppliers but without any actual supply of goods - The Revenue examined the vehicle details mentioned in the invoices & concluded that they did not have the capacity to ferry such input goods - It was also alleged that owners of such vehicles denied having transported any goods - Weighbridge owners were summoned & they too denied having weighed any goods - Statements of the director of the assessee company were taken whereupon he was unable to explain the discrepancy in transport details - Hence duty demand was raised with interest & penalty u/r 26 of CER 2002 - Such findings were upheld by the Commr.(A).

Held: Contrary to evidence relied on by the Revenue, assessee recorded receipt of input goods in RG-23A & mentioned purchases in books of account - Payments for goods & their transportation had been made buy cheque - Revenue could not prove diversion of goods - Neither did it prove that such inputs were not used to manufacture final products nor did it prove that the assessee received some financial flowback - Service tax paid on transportation proves its genuineness - Revenue cannot allege non-receipt of goods based on mere RTO reports - Hence the demands be set aside: CESTAT (Para 1,5)

- Appeals allowed: AHMEDABAD CESTAT

2018-TIOL-2781-CESTAT-AHM

Hari Om Chemicals Vs CCE & ST

CX - Assessee is engaged in manufacturing excisable goods and are availing benefits under Notfn 08/2003-CE - The assessee was also engaged in undertaking Job Work for another party and were claiming of Notfn 83/94-CE - A SCN was issued to assessee denying them the benefit of Notfn 83/94-CE on the ground that the manufactures who supplied them, the goods for Job Work neither had any factory nor manufacturing facilities and was also not registered under Excise - The principal had also not filed the declaration with jurisdiction of Central Excise Authority undertaking to used the goods received from the Job Worker for manufacturer of dutiable goods - In instant case Power of Attorney holders of his principal supplying the goods for Job Work, and the assessee manufacturer, was common entity - In this circumstance, the claim of assessee that they cannot be expected to know about of activities of the Principal full flat: CESTAT

- Appeal dismissed: AHMEDABAD CESTAT

CUSTOMS

NOTIFICATION

ctariff18_060

CBIC permits re-import without payment of BCD of certain indigenously-manufactured electronic items for repair & reconditioning purposes

CASE LAWS

2018-TIOL-2780-CESTAT-AHM

Bright Shiptrans Pvt Ltd Vs CC

Cus - The assessee's license as Customs Broker was suspended by the Pr. Commr. under Rule 19 of CBLR, 2013 - In addition, prohibition order was passed under Regulation 23 of CBLR, 2013 - Hence, the present appeal.

Held - The investigations in respect of this matter is complete, various SCN were issued and assessee was not made a noticee in any one of them - No proceedings were initiated against the assessee and there is no penalty or any other action proposed against the assessee - The adjudication process has already been completed without any penalty or any other action, there is no justification of continuation of the suspension of the licence - Therefore, suspension order is revoked - While passing prohibition order the assessee was not given any opportunity of hearing - Following the ratio laid down in the case of M/s SSS Sai Shipping Services Pvt Ltd vs UOI an opportunity of hearing has to be given to the party prior to passing such order - The case is remanded for passing fresh order : CESTAT (para 1, 2)

- Appeal Partly Allowed: AHMEDABAD CESTAT

2018-TIOL-2779-CESTAT-MAD

Anees Fathima Bande Nawaz Vs CC

Cus - The appellant was apprehended by the Customs department at the airport on suspicion of smuggling gold - Examination revealed appellant to be wearing gold chain - Such chain was seized for non-declaration - SCN was issued for such seizure and also raising duty demand - In subsequent order, two gold chains were confiscated & penalty was imposed u/s 112(a) of Customs Act along with penalty u/s 114AA - On appeal, the Commr.(A) allowed partial relief by quashing penalty imposed u/s 114AA.

Held: The appellant claimed that the gold chains were worn on her person and were not found in her baggage - Hence she claimed them to be her personal effects - However definition of 'personal effects' under Rule 2(vi) of New Baggage Rules do not include jewellery within their ambit - Hence the chains would classify as part of 'baggage' - Thus the present appeal is not maintainable: CESTAT (Para 1,5,6)

- Appeal dismissed: CHENNAI CESTAT